June 5, 2006

 

India's STC close to resolving wheat quality issue with AWB

 

 

State Trading Corp (STC) of India is close to settling the quality issues over delayed wheat import from Australia's AWB, a senior STC official said Friday (Jun 2).

 

The delayed shipments are expected to begin shortly, the official said.

 

"We are not making any concessions in the original contract specifications for the importation of 500,000 tonnes of wheat from AWB but still I can say the issue seems close to being resolved now," the official told Dow Jones Newswires.

 

The official said the issue primarily related to obtaining a certificate from Australian Quarantine and Inspection Service (AQIS) that the India-bound wheat meets all norms specified in the contract, including complete absence of ergot fungi.

 

STC is importing wheat on behalf of India's federal government and in March this year it awarded a 500,000-tonne contract to AWB for delivery by mid-May.

 

Due to the delay, no cargo has been delivered after two shipments totalling around 92,000 tonnes landed in the south Indian ports of Chennai and Tuticorin.

 

The issue was also taken up at the government level when Australian High Commissioner to India, John McCarthy, discussed it with officials at India's federal food ministry.

 

He said AWB will have to supply wheat in line with the specifications already made in the 500,000-tonne supply contract along with the requisite certificate from AQIS.

 

"Let them first dispatch the cargo. Once it arrives in India, we will take a view," said the official.

 

The execution of the contract is running behind schedule.

 

All the consignments were to arrive through five south Indian ports--Mangalore, Chennai, Tuticorin, Visakhapatnam and Cochin by mid-May.

 

Under conditions of the tender, between 250,000 and 300,000 tonnes of wheat were contracted to arrive by the end of April.

 

Earlier this week, Junior Minister for Food Akhilesh Prasad Singh said the remaining shipments are expected to arrive in four to five weeks.

 

While in the tender to import 500,000 tonnes of wheat, it was mandatory that cargos be completely free of ergot fungi, the condition was relaxed in the subsequent 3.0-million-tonne tender, allowing up to 0.01 percent of grain with ergot.

 

Under the second tender, AWB will supply another 500,000 tonnes for delivery by October in the western Indian port of Mundra.